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The Economic Impact of Climate Change on Southern Mediterranean Countries




Interview with Dr. Abeer El-Shinnawy (FEMISE, American University in Cairo) within the context of the FEMISE & Institut de la Méditerranée contribution to the ENERGIES2050 report [1] on” Challenges to Climate Change in the Mediterranean” released at the occasion of the international COP22 conference that took place in Marrakech on November 15th 2016.



The Economic Impact of Climate Change on Southern Mediterranean Countries
How vulnerable are Mediterranean countries to climate change and why?

The Southern Mediterranean countries are considered as particularly vulnerable to the impact of climate change. This is mainly due to their geographical position and their dependence on climate sensitive sectors like agriculture and tourism. On the other hand, rising sea level is expected to endanger the lively hood of millions living in coastal areas of the Mediterranean sea. This is why assessment of the economic cost of climate change and planning for timely adaptation to climate change is imperative.

You gave the example of agriculture and tourism, can you give an assessment of costs of climate change as they pertain to these two sectors?

With regards to agriculture, climate change affects the sector mainly through its effect on crop yields. For instance, wheat yields could fall up to -5.7% in Tunisia and -7.3% in Morocco under changing climatic conditions by 2050. But one must not only look at the effect of local climate change on the economy of a particular country, but also the effect of global warming on global yields and its impact on world food prices and in turn how this impacts the local economy.

As for tourism, it is expected to be adversely affected by a warmer climate. By 2050, an estimated 1.9% increase in temperature is expected to decrease tourism demand in coastal areas in Morocco by 6% assuming no adaptation policies are implemented (and by 2% in Tunisia).

But perhaps the most damaging effect of climate change in the region will be most felt due to rising sea level. In the event of rising sea level, coastal cities in Egypt and Turkey will be threatened, Istanbul in particular.

Istanbul. Photo C.Garcia
Istanbul. Photo C.Garcia
Are there any benefits that Mediterranean countries can derive from climate change ?

Indeed, some benefits can very well materialize. Mitigating climate change can have local benefits that can lead higher economic growth. Put differently, by promoting what has come to be known as green growth, mitigation can lead to local benefits. It is possible to make growth more resource efficient, cleaner and more resilient without necessarily slowing it. In this respect, several channels through which a better natural environment can affect economic growth can be identified. These channels range from increasing the quality of factors of production; increasing resilience to environmental shocks; increasing the job content and poverty eradication features of economic growth etc…

Removing subsidies on energy

Are there specific examples of sectors in the Mediterranean that can grasp opportunities linked to climate change?

Opportunities are not confined to any particular sector, but manufacturing, finance and insurance, construction and professional, scientific and technical activities stand out. In the case of manufacturing, products to support agriculture- example fertilizers and pesticides whose demand is likely to increase as a result of climate change- and health care provide opportunities. For Finance and insurance, opportunities include new products and services and insurance premium price as insurance permits individuals and companies to pool risk. On the other hand, demand for climate resilient homes provides an impetus to the growth of the construction sector.

What can Mediterranean countries do to stop climate change? What Policies and what Actions?  

To stop climate change, Mediterranean countries need to cut back on their emissions of GHG, in great part through reduction in the consumption of fossil fuels. In countries such as Egypt, removing subsidies on energy could be part of policies to achieve this objective.

What can be done at the EuroMed level that is not already being done?

In general, Mediterranean countries need to diversify more and not be solely dependent on climate sensitive sectors like agriculture and tourism. Most importantly, these countries must inform their citizens of the repercussions of climate change for their livelihood so that they start investigating possible adaptation measures. In particular, and in response to the potential threat of rising sealevels, countries could consider that investment in coastal areas comes to a hault. In this regard, evidence so far points that citizens are unaware of such problems and in countries like Egypt, they continue to undertake important investments in potentially dangerous areas.

More importantly, institutional cooperation between North and South Mediterranean countries is most needed to implement and enforce policies that cut back on GHG. It is needless to mention that the lack of efficient institutions to design and implement policies to cut back on GHG and the lack of design adaptation measures are considered one of the most important bottlenecks these countries are facing as they confront climate change.

For more on this timely subject, please read the report available here.
The report (in French) is available for download by clicking here.
 
[[1]] ENERGIES2050 is a french association based in Nice (France). It seeks, in particular, to promote and encourage containing energy demand: energy saving, energy efficiency and the development of renewable energies. FEMISE and Institut de la Méditerranée have partnered with this important partner in the field of climate change to have an additional channel to contribute in meeting the challenges the EuroMed region is facing and reaching out to policy-makers.

Interview realized by Femise

Version française


 

The Femise team


Monday, December 12th 2016



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